Invest
Robo-advice not quite right
A Sydney-based digital advice licensee has voluntarily shut down its digital advice tools after concerns were raised about the quality of advice they were providing to clients.
Robo-advice not quite right
A Sydney-based digital advice licensee has voluntarily shut down its digital advice tools after concerns were raised about the quality of advice they were providing to clients.
ASIC reported that it held concerns about the levels of inquiry made by the online tools about client objectives, financial situation and needs after reviewing samples of advice files from Plenty Wealth and Lime Wealth.
The corporate authorised representatives of Lime FS Pty Ltd – Plenty Wealth Pty Ltd (Plenty Wealth) and Lime Wealth Pty Ltd (Lime Wealth) – are digital advice providers that are authorised to provide personal financial advice to consumers.
However, in some instances, recommendations generated by the tools conflicted with client goals or other recommendations that had been generated, ASIC flagged.
The corporate regulator said it raised its concerns with Lime FS about the quality of advice being generated, as well as the company’s ability to monitor the giving of such advice.
It has led to Lime FS making the decision to close down both tools for the foreseeable future.
Plenty Wealth provided advice around budgeting analysis, life insurance reviews, tax, investment and superannuation recommendations through an online tool.
Lime Wealth – also an online tool – provided guidance on the establishment of SMSFs, purchasing property through superannuation, the commencement and easing of pensions, and contributions into superannuation.
Commenting on the matter, ASIC commissioner Danielle Press said “digital advice tools offer a convenient and low-cost alternative to consumers who may otherwise not seek personal financial advice”.
“However, the advice provided through these tools must meet the same legal obligations required of human advisers – the advice must be appropriate to the client and comply with the best interests duty,” she continued.
She further highlighted that ASIC expects AFS licensees and financial advisers using or recommending digital advice tools “to ensure that they adequately monitor and test the advice for quality and appropriateness”.
ASIC has told consumers who might be concerned about the advice they have received from these services to lodge a complaint with Lime FS via its internal dispute resolution process, notify the Australian Financial Complaints Authority of a dispute, or contact your current financial adviser or a lawyer for advice.
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